nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒12‒05
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The changing shape of spatial inequality in the United States By Kemeny, Tom; Storper, Michael
  2. Innovation and competitiveness: the regional dimension By Milene Simone Tessarin; Carlos Roberto Azzoni; ;
  3. Knowledge spillovers, related variety and firm heterogeneity By Cainelli, Giulio; Ganau, Roberto
  4. EU Cohesion Policy on the Ground: Analyzing Small-Scale Effects Using Satellite Data By Julia Bachtrögler-Unger; Mathias Dolls; Carla Krolage; Paul Schüle; Hannes Taubenböck; Matthias Weigand
  5. Dynamic agglomeration effects of foreigners and natives – The role of experience in high-quality sectors, tasks and establishments By Niebuhr, Annekatrin; Peters, Jan Cornelius; Roth, Duncan
  6. The Policy Implications of Economic Complexity By Cesar A. Hidalgo;
  7. Regional Institutional Quality and Territorial Equity in LTC Provision By Anna Marenzi; Dino Rizzi; Michele Zanette; Francesca Zantomio
  8. The Role of Immigrants, Emigrants, and Locals in the Historical Formation of Knowledge Agglomerations By Viktor Stojkoski; Philipp Koch; Cesar A. Hidalgo;
  9. Aging and real estate prices in Germany By Breidenbach, Philipp; Jäger, Philipp; Taruttis, Lisa
  10. Distributional Effects of Local Minimum Wages: A Spatial Job Search Approach By Todd, P.; Zhang, W.
  11. Multidimensional Economic Complexity: How the Geography of Trade, Technology, and Research Explain Inclusive Green Growth By Viktor Stojkoski; Philipp Koch; Cesar A. Hidalgo;
  12. Green technology and income inequality: an empirical analysis of US Metro Areas By Nicolo Barbieri; Davide Consoli; Giovanni Marin; Francois Perruchas

  1. By: Kemeny, Tom; Storper, Michael
    Abstract: Spatial income disparities have increased in the United States since 1980. Growth in this form of inequality is linked to major social, economic and political challenges. Yet, contemporary patterns, and how they relate to those of the past, remain insufficiently well understood. Building on population survey microdata spanning 1940-2019, this paper uses group-based trajectory modelling techniques to identify distinct sets of local labor markets based on the evolution of their income levels. We find that the increase in spatial inequality since 1980 is almost entirely driven by a small number of populous, economically-important, and resiliently high-performing `superstar' city-regions. Meanwhile, since 1940, much of the rest of the urban system has continued to converge toward the mean. We examine the demographic, economic and social characteristics of these different trajectories, identifying catch-up regions, declining regions, long-term winners, and possible future superstars. There is considerable turbulence within the convergence process, consisting of regions that are moving both upward and downward in the system. We conclude by exploring implications for the American urban-regional system in the mid-21st century, considering the challenges in overcoming the growing split between superstar locations and the rest of the country.
    Date: 2022–06–27
  2. By: Milene Simone Tessarin; Carlos Roberto Azzoni; ;
    Abstract: This study explores the importance of labour pool and geographical concentration as essential factors that help shape pathways for innovation and influence the speed with which technological change can occur. To do so, we propose an approach based on human capital and the workers’ skills that contribute to innovation. Being able to capture this broader range of professionals is crucial to assess regional innovation in Less Developed Countries, such as Brazil and other Latin American countries, as their productive structure concentrates on lower technological industries and innovative activities not centred on R&D. We created a measure of innovative potential that can be used at different levels of regional disaggregation. We analyze 374 relevant Brazilian Labour Market Areas (LMA), employing data on occupations from the Annual Report of Social Information, from 2003 to 2018. Although innovative activities are heavily concentrated in a few regions, empirical evidence suggests that a shift has occurred since the early 2000s, with lagging regions making progress faster. Nonetheless, our results show that such convergence is still slight, given the distance between the leading and lagging regions’ innovative performance. Factors related to the region’s previous capacities, such as the stock of workers with innovative skills, manufacturing industry share, and the number of large firms have a positive association with innovative activity in a region. Although the convergence in the innovative potential among Brazilian regions, the movement is too slow to indicate a transformation of the country as a whole to levels similar to those of developed nations.
    Keywords: regional innovation, regional inequality, skills of workers, structural change
    JEL: O30 O33 R11 J24 L16
    Date: 2022–10
  3. By: Cainelli, Giulio; Ganau, Roberto
    Abstract: Economic geographers and regional economists have traditionally analysed the mechanisms driving learning processes and the diffusion of knowledge among local economic actors. During the past decade, the concept of «related variety» has been frequently used to denote an agglomeration force able to explain knowledge-related advantages for firms and geographically bounded productive systems, and which arises from the heterogeneity of local industries. Besides this concept, more recent studies have emphasised the role of firm heterogeneity as an alternative – but not substitute – mecha-nism for knowledge creation and diffusion. This paper discusses the factors driving the emergence of knowledge spillovers within agglomerative spaces, and conducts a critical comparison between the concepts of industrial related variety and firm heterogeneity as two potential sources of local knowledge externalities, and, thus, of local economic development.
    Keywords: agglomeration economies; knowledge spillovers; related variety
    JEL: J1
    Date: 2021–05–01
  4. By: Julia Bachtrögler-Unger; Mathias Dolls; Carla Krolage; Paul Schüle; Hannes Taubenböck; Matthias Weigand
    Abstract: We present a novel approach for analyzing the effects of EU cohesion policy on local economic activity. For all municipalities in the border area of the Czech Republic, Germany and Poland, we collect project-level data on EU funding in the period between 2007 and 2013. Using night light emission data as a proxy for economic development, we show that the receipt of a higher amount of EU funding is associated with increased economic activity at the municipal level. Our paper demonstrates that remote sensing data can provide an effective way to model local economic development also in Europe, where no comprehensive cross-border data is available at such a spatially granular level.
    Keywords: regional development, EU cohesion policy, remote sensing
    JEL: R11 O18 H54
    Date: 2022
  5. By: Niebuhr, Annekatrin (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Kiel); Peters, Jan Cornelius (Thünen Institute); Roth, Duncan (Institute for Employment Research (IAB), Nuremberg, Germany)
    Abstract: "This paper analyzes how dynamic agglomeration effects differ between foreign and native workers using administrative data on individual employment biographies. According to our results, both groups benefit, on average, equally from gathering work experience in large labor markets. The exception are low-skilled foreign workers, who receive a lower premium for big city experience than low-skilled natives. Providing new evidence on the sources of dynamic agglomeration effects, we show that this difference disappears once we consider the sectors, tasks and establishments, in which foreign and native workers gather experience. More generally, our results indicate that, on average, around 50% of the return of an additional year of experience gained in the densest regions can be ascribed to the acquisition of experience in higher-quality jobs in large cities." (Author's abstract, IAB-Doku) ((en))
    Keywords: IAB-Open-Access-Publikation ; Integrierte Erwerbsbiografien
    JEL: J31 J61 R12 R23
    Date: 2022–11–14
  6. By: Cesar A. Hidalgo;
    Abstract: In recent years economic complexity has grown into an active field of fundamental and applied research. Yet, despite important advances, the policy implications of economic complexity remain unclear. Here I organize the policy implications of economic complexity in a framework grounded on 4 Ws: what approaches, focused on identifying target activities and/or locations; when approaches, focused on when to time support for developing related and unrelated activities; where approaches, focused on the geographic diffusion of knowledge; and who approaches, focused on the role played by agents of structural change. The goal of this framework is to clarify the policy implications of recent work in economic complexity and to facilitate its continued use in regional and international development efforts. nations.
    Keywords: economic complexity, economic policy, structural change
    JEL: O11 O25 O33 R11 R58
    Date: 2022–11
  7. By: Anna Marenzi (Department of Economics, University Of Venice CÃ Foscari; CRIEP); Dino Rizzi (Department of Economics, University Of Venice CÃ Foscari; CRIEP); Michele Zanette (Department of Economics, University Of Venice CÃ Foscari; CRIEP); Francesca Zantomio (Department of Economics, University Of Venice CÃ Foscari; CRIEP; HEDG (York))
    Abstract: We show how regional governments affect the appropriate – in terms of territorial equity - assignment of a national LTC benefit. We analyse a three-layers setting, where eligibility criteria are defined by the central government (which bears the fiscal cost of transfers) but the assignment decision is taken by regional medical commissions, while applications are activated by individual potential beneficiaries. Combining administrative and survey data, and accounting for regional variation in eligibility prevalence, we document large territorial disparities in need-adjusted benefit assignment. We investigate the determinants of such disparities both in terms of individuals’ differential propensity to claim, and of regional discretionary behaviour, as shaped by the underlying quality of regional institutions. Regional discretion appears to play a major role, with local institutional quality accounting for about one fifth of explained variation in need-adjusted benefit coverage. Lower regional institutional quality results in more opportunistic benefit adjudication decisions, although the relationship is attenuated in highly deprived areas.
    Keywords: Territorial equity, regional discretion, multi-level government, institutional quality, long-term care, benefit targeting
    JEL: C13 H11 H53 H75 J14
    Date: 2022
  8. By: Viktor Stojkoski; Philipp Koch; Cesar A. Hidalgo;
    Abstract: Did migrants help make Paris a center for the arts and Vienna a beacon of classical music? Or was the rise of these knowledge agglomerations a sole consequence of local actors? Here, we use data on the biographies of more than 22,000 famous historical individuals born between the years 1000 and 2000 to estimate the contribution of famous immigrants, emigrants, and locals to the knowledge specializations of European regions. We find that the probability that a region develops a specialization in a new activity (physics, philosophy, painting, music, etc.) grows with the presence of immigrants with knowledge on that activity and of immigrants specialized in related activities. We also find that the probability that a region loses one of its existing areas of specialization decreases with the presence of immigrants specialized in that activity and in related activities. In contrast, we do not find robust evidence that locals with related knowledge play a statistically significant role in a region entering or exiting a new specialization. These findings advance our understanding of the role of migration in the historical formation of knowledge agglomerations. nations.
    Keywords: migration, knowledge spillovers, relatedness, economic history
    JEL: N13 N93 O15 O33
    Date: 2022–11
  9. By: Breidenbach, Philipp; Jäger, Philipp; Taruttis, Lisa
    Abstract: Exploiting regional heterogeneity in population dynamics across more than 10,000 municipalities in Germany, we provide robust empirical evidence that population aging depresses real estate prices and rents. Using millions of individual real estate offers and detailed demographic data on the municipality level, we estimate that average sales prices in 2020 would have been up to 12% higher, if the population age distribution had been the same as in 2008. We show that population aging does not only reduce prices but also increases the availability of real estate. Moreover, we document substantial heterogeneity in price responses by dwelling type, real estate characteristics and urban-rural status which suggest that a lower demand for living space and live-cycle dissaving are driving our results. We predict that population aging will continue to put downward pressure on real estate prices and exacerbate regional disparities in Germany.
    Keywords: Real estate prices,population aging,Germany
    JEL: J11 R21 R31
    Date: 2022
  10. By: Todd, P.; Zhang, W.
    Abstract: This paper develops and estimates a spatial general equilibrium job search model to study the effects of local and universal (federal) minimum wage policies on employment, wages, job postings, vacancies, migration/commuting, and welfare. In the model, workers, who differ in terms of location and education levels, search for jobs locally and in a neighboring area. If they receive remote offers, they decide whether to migrate or commute. Firms post vacancies in multiple locations and make offers subject to minimum wage constraints. The model is estimated using multiple databases, including the American Community Survey (ACS) and Quarterly Workforce Indicators (QWI), and exploiting minimum wage variation across state borders as well as time series variation (2005-2015). Results show that local minimum wage increases lead firms to post fewer wage offers in both local and neighboring areas and lead lower education workers to reduce interstate commuting. An out-of-sample validation finds that model forecasts of commuting responses to city minimum wage hikes are similar to patterns in the data. A welfare analysis shows how minimum wage effects vary by worker type and with the minimum wage level. Low skill workers benefit from local wage increases up to $10.75/hour and high skill workers up to $12.25/hour. The greatest per capital welfare gain (including both workers and firms) is achieved by a universal minimum wage increase of $12.75/hour.
    Keywords: spatial equilibrium, minimum wage, labor relocation, commuting
    JEL: J61 J63 J64 J68 R12 R13
    Date: 2022–11–08
  11. By: Viktor Stojkoski; Philipp Koch; Cesar A. Hidalgo;
    Abstract: To achieve inclusive green growth, countries need to consider a multiplicity of economic, social, and environmental factors. These are often captured by metrics of economic complexity derived from the geography of trade, thus missing key information on innovative activities. To bridge this gap, we combine trade data with data on patent applications and research publications to build models that significantly and robustly improve the ability of economic complexity metrics to explain international variations in inclusive green growth. We show that measures of complexity built on trade and patent data combine to explain future economic growth and income inequality and that countries that score high in all three metrics tend to exhibit lower emission intensities. These findings illustrate how the geography of trade, technology, and research combine to explain inclusive green growth. nations.
    Keywords: economic complexity, inclusive green growth, complex systems
    JEL: F14 F43 O12 O15 O47 Q56
    Date: 2022–11
  12. By: Nicolo Barbieri; Davide Consoli; Giovanni Marin; Francois Perruchas
    Abstract: Climate change is a global phenomenon with markedly local manifestations. Accordingly, territories differ in terms of exposure to climate events, of capacity to adopt climate mitigation policies and of the welfare effects that these deep transformations entail. The paper brings together these threads with an empirical study of the relationship between green technology development and income inequality in US Metropolitan Areas over the period 2005-2015. We find a positive association between local patenting capacity and growing income gaps to the detriment of the least affluent. Further, higher patenting propensity in early stage technologies has a stronger association with income inequality, whereas such a relationship dissipates at later stages of the life cycle.
    Keywords: environmental technologies, technology lifecycle, inequality
    JEL: O33 R11 D63
    Date: 2022–10

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